Container freight rates are rising amid Middle East disruption, though volatility remains below Covid-era extremes.
Shippers “should not panic” despite surge in Middle East ocean spot rates
The increasing volatility in freight rates caused by the Iran war is not comparable in scale to the extreme freight rate inflation of the Covid period, analysis from Drewry Shipping Consultants shows.
According to Drewry Container Freight Rate Insight data updated yesterday, spot ocean on East-West and North-South routes at the height of the Covid shipping disruptions in 2020 were both much higher and more volatile than what has just been experienced by typical spot market shippers in the first month of the Iran conflict.
Unlike the airfreight market, the container shipping market has not seen a significant fall in capacity after the start of the Iran war, with the exception of capacity to and from the Gulf. (See my comment of yesterday on volatility in the air cargo market.)
In my opinion, the increase in ocean rates on non-Middle East-connected routes will be manageable and shippers should not panic.
Drewry Container Freight Rate Insight data shows that, on Middle East-connected routes only, ocean rates are undergoing Covid-level volatility and currently even higher freight rates – see link in the comments below for details.
Even then, rates may soften as some opportunistic pricing adjusts.
Source: Philip Damas, Drewry (Linkedin)
